This paper examines the impacts of China's One-Child Policy (OCP) fines on the marriage market outcomes. We develop a theoretical framework that connects fertility, marriage, and education decisions within an overlapping generations model with transferable utility. In particular, if higher OCP fines increase the advantage women with higher educational attainment who choose to enter the marriage market at a later stage over their counterparts with lower educational attainment in terms of the expected marriage gains, then more female decision-makers will choose to achieve higher educational attainment. We verify these connections using National Population Census of China and manually collected provincial data on expected OCP fines between 1979 and 2015. Among urban women in the ethnic majority group, a one-unit increase in average expected OCP fines, equivalent to a year of household income and averaged over ages 6 to 20, is associated with more than 10 percentage point increase in the probability of completing high-school. It is also associated with an approximately 5 percentage point wider gap in the later-stage probability of being matched between those with and without a high school diploma, which transfers into an expanding advantage in expected marriage gains for those who have completed the high school. By contrast, no significant effect is observed among their rural counterparts.
This paper characterizes a class of individual preferences in which heterogeneous social members care not only about their own consumption, but also about the minimum consumption in society. The key axiom triggering such concern is an indifference preference on the consumption distribution of others whenever a social member is “miserable”, defined as possessing the lowest disposable endowment after transfer. The characterized individual preferences, represented by a linear combination of a personalized social utility function increasing in the minimum consumption in society and an egoistic utility function increasing in one's own consumption, can support an endogenous social minimum without relying on any exogenously-given judgement. This paper then evaluates the dynamics of the endogenous social minimum by the ruling of a benevolent utilitarian social planner, and reveals certain path-dependent feature of the redistribution process. While a social planner can facilitate higher transfers from rich social members to poor social members and minimize the consumption inequality, the endogenous social minimum can also be supported through voluntary contributions from social members following the common approach in public goods literature. Nevertheless, total voluntary contribution will converge to zero if the society expands by self-replicating the original set of social members.
Boston College IRB Review Exempt Approval - Protocol Number: 25.1046
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